UBS Lifts PepsiCo (PEP) Target After Solid Q4 Execution

PepsiCo, Inc. (NASDAQ:PEP) is included among the 15 Best Wide Moat Dividend Stocks to Invest in.

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On February 4, UBS analyst Peter Grom raised his price recommendation on PepsiCo, Inc. (NASDAQ:PEP) to $190 from $170. The analyst also reiterated a Buy rating on the stock. The call followed a solid fourth quarter, helped by better organic sales growth and steady profit delivery. Management also reiterated its 2026 outlook, which gave investors something familiar to anchor to.

A day earlier, the company acknowledged a shift in pricing. According to Reuters, PepsiCo plans to cut prices on core snack brands like Lay’s and Doritos by as much as 15%. The move comes after consumer pushback to several rounds of price hikes. PepsiCo confirmed the plan on February 3, shortly after topping fourth-quarter expectations.

This is happening as packaged food companies face a tougher consumer backdrop. The growing use of appetite-suppressing weight-loss drugs is changing how people think about snacks and soda. Brands are being pushed to rethink not just what they sell, but how they sell it. For PepsiCo, portion control has become a key lever. CEO Ramon Laguarta said more than 70% of the company’s US food portfolio now comes in single-serve sizes. That reflects how many consumers want smaller, more controlled purchases rather than full-size packs.

The company is also refreshing major brands like Quaker, Gatorade, Lay’s, and Tostitos. The focus is shifting toward lower sugar options and fewer artificial ingredients, especially to appeal to younger households with children. It’s a gradual adjustment, not a sharp pivot.

At the same time, PepsiCo was clear about the pressure on budgets. Affordability remains “the biggest cause for friction” for low- and middle-income consumers when it comes to snack spending. Management expects these targeted, or “surgical,” price cuts to help North America snacks return to volume growth this year.

PepsiCo, Inc. (NASDAQ:PEP) operates across beverages, food, and snacks, with major segments spanning North America and international markets. The current approach shows a company listening more closely to consumers and adjusting where it needs to, even if that means stepping back on pricing to protect volumes.

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Disclosure: None.